Money at stake in Star tower proposal goes to the crux of Sydney's planning issues

A short stroll toward Darling Harbour from where the Star casino wants to build a 237-metre hotel and apartment tower in Pyrmont, the Maritime Museum is running an exhibition: "Bligh - Hero or Villain?" William Bligh, the fourth governor of NSW, might have something to say about the Star’s travails.

The Rum Rebellion that deposed Bligh, in the only armed insurrection in Australian history, was not really an argument about drink: it was about waterfront property development. Bligh did not want the entrepreneurs in the Rum Corps building on land that stretched to what is now Circular Quay. He preferred a park and a church. It was Bligh’s intransigence in “pulling down houses and preventing others from building on their leaseholds” that animated the colony, according to the landowner John Blaxland, and motivated the Corps to arrest Bligh and return him to England.

The existing view (left) and an artist's impression of the view with the proposed tower (right).Credit:NSW Planning

Waterfront property disputes are almost as common as melanoma in Sydney – if not quite as vicious. The latest pits the Star casino against bureaucrats in the Department of Planning, Industry and Environment, which sits under the control of Minister Rob Stokes. The rancour in the dispute is understandable. There is a lot of money at play. The Star wants to build 204 luxury apartments, as well as a 220-room Ritz-Carlton hotel. Assume a very conservative $2 million per apartment, and the department’s suggested refusal of the proposal becomes a half-a-billion-dollar veto – before you get to the hotel part of the tower.

But the money at stake also goes to the crux of the issue: if everyone who controlled waterfront property in Sydney was able to put as many apartments on their land as they could, everyone surely would. The owner of the corner store across the road from the Star would. So would the owners of the office block and the Vietnamese sandwich shop. This might all work out fine. But we might also wish that someone was around to check whether the streets were wide enough, or that there was somewhere to eat lunch, or that the sewage pipes could accommodate all the activity.

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It is for these sorts of reasons that people who think about planning tend to stress the importance of the way in which the decisions are made, as opposed to the decisions themselves. Planning creates winners and losers: the system needs to be seen to be fair. Stokes, with his doctorate and his degree from Oxford, is one of those who bangs on about the rules of the game. “Planning is a process,” Stokes declared from the opposition benches. “It is the process that produces good outcomes, not the other way round.”

So what’s the process here?

One irony in the Star debate is that those pushing for the government to approve the proposal want it to do so under a law the Coalition swore to abolish. That law is the much-decried former Part 3A of the Environmental Planning and Assessment Act. This section gave planning ministers almost infinite powers to approve particular developments. The Coalition did abolish Part 3A, but applications made prior to 2011 can still be assessed under it. The Star’s current application was, technically if bizarrely, made a decade ago.

The decision to approve or reject the application is not Stokes’. In 2011 the Coalition determined that contentious applications made under this stream should be determined by a separate body – now called the Independent Planning Commission. The commission has not rejected or approved the tower. This decision is not due for months. Stokes’ role is limited to overseeing the department, which recommended to the commission that it reject the proposal.

Planning Minister Rob Stokes and NSW Premier Gladys Berejiklian have called for a review into planning controls in Pyrmont.Credit:AAP

This is where things get tricky for the Star – and for those, like Premier Gladys Berejiklian who, in the face of a ferocious campaign led by usual media suspects such as Alan Jones and TheDaily Telegraph, would clearly like to see the Star’s application succeed. Because when those unnamed bureaucrats were making their recommendation, they could not find one state government policy that clearly called for a 237-metre tower in the area. If there was a straight indication the government had thought about such a tower, and wanted one, the report shows the department would have recommended approval.

The department instead had before it various policies that undermined the case for the tower. The area is not zoned for residential apartments, but commercial only. This is not a huge deal – large proposals are regularly approved outside zoning restrictions. But it’s a factor to take into account.

The department was also obliged to consider the City of Sydney’s hostility to the proposal. That obligation reflects the wording of planning laws, which in turn reflects the fact that politicians, on all sides, say to the world they think councils are important: “Local planning is a function of local government and there is no place for the state government to override or second-guess the decisions of the community,” the former premier Nick Greiner once said, in a speech quoted by Stokes. “Councils should be able to determine the nature of developments in their areas.”

The latest waterfront dispute pits the Star casino against bureaucrats in the Department of Planning, Industry and Environment.Credit:Edwina Pickles

And then there are a bunch of more specific state instruments. One aimed at improving apartment quality looks askance at proposals that “would appear isolated, obtrusive and overly dominant”. The Star’s tower would sit hundreds of metres from any comparable towers; it would appear isolated. Another instrument applies to land around Sydney Harbour. This policy recommends against proposals that favour private interests over public.

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Most damning of all, however, is that the most recent and potentially the most powerful document laying out the government’s “vision” for Pyrmont offers no straight indication that it supports this sort of tower.

The District Plan for the area, finished only last year by the Greater Sydney Commission (GSC), indicates a general preference for more housing and more jobs. But it offers nothing that would give clear guidance on whether the past 30 years of development in Pyrmont – which has transformed an industrial area into the most densely populated suburb in Australia, based on building heights limited largely to eight storeys – should be overturned in favour of a willingness to allow 66-storey towers.

The GSC’s only instruction is that Pyrmont should be an “innovation corridor”. Does this mean the tower should be allowed? Who knows. The Star argues that it does; others question the relationship between luxury apartments and “innovation”. The City of Sydney, which has the job of trying to implement the GSC’s vision, clearly thinks innovation means something different: it has spent the past year or so trying to come up with ways to get new businesses to open in Pyrmont.

It is for these sorts of reasons that Leslie Stein, adjunct professor of urban planning at the University of Sydney, this month described the NSW planning system as the “least democratic” and “most complicated” in the world. Stein was comparing the results of his comparative study of 80 international jurisdictions. “I found none as complicated as here,” Stein said. “Not even close.” If no one can understand the system, no one can properly contribute to it; therefore no one can legitimise it.

This woolliness can work against the interests of landowners and developers, just as it can alienate residents. The best argument in Star’s favour is that if its tower was so clearly against government policies, someone should have said as much before the Star spent millions on its proposal.

Or maybe someone did, but the Star nevertheless thought it could get its tower approved. Which also might have been fair enough, based on what has gone before. “Planning is all about precedent,” says John Mant, a former commissioner of the Independent Commission Against Corruption and a consistent critic of decades of planning policy. “If you give somebody an extra floor then the people next door have an extra floor.”

The relevant precedent here is clear: before Barry O’Farrell’s government granted Crown Resorts a casino licence for Barangaroo, the Star thought it had a monopoly on the city’s casino business. Then the government handed Crown the right to build an apartment, casino, and hotel block on waterfront land once slated for a park, and on which the government had never contemplated residential development.

Crown's complex under contruction at Barangaroo. The Star is visible in the background.Credit:Edwina Pickles

The point here is that because the GSC, among others, has failed to provide a clear language that all participants – developers, landowners, residents and planners – can use to assess proposals such as the Star’s, the Star may have been right to assume its proposal would be assessed in the usual way. Packer got a big one, so why not it?

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Faced with uncertain numbers in the NSW Upper House, Stokes appears to have abandoned the idea of substantial legislative changes to make planning in NSW simpler, cleaner, and more democratic. Instead, his government has responded to the latest explosion of interest with another “review”, itself likely to lead to more complexity. The GSC has been given five weeks to have another look at planning controls in Pyrmont, though the Premier has seemingly already determined the outcome she wants: Pyrmont is “open for business” and is to get a “facelift”. Berejiklian and Stokes will have to wear the criticism they’re making it up as they go along – potentially to favour a big-money proponent.

In the meantime, Lucy Turnbull has the ball. The chair of the GSC, Turnbull is of course married to Malcolm Bligh Turnbull – named for the crotchety governor who lost his job blocking waterfront development. This is serious business, not least for Stokes: he has already been moved out of the planning portfolio once in his career. But Malcolm might also be able to provide some advice based on his own political history: that craven capitulation to the loudest voices in the room offers no guarantee of sustained success.